ICICI Bank, which posted a massive plunge in net profit in the March quarter on a spike in bad loans, expects the asset quality pain to continue at "elevated levels" this fiscal...

Managing Director and Chief Executive Chanda Kochhar said the bank is confident of maintaining a healthy capital base with the core capital of over 11 per cent by March 2018. (Reuters)

ICICI Bank, which posted a massive plunge in net profit in the March quarter on a spike in bad loans, expects the asset quality pain to continue at “elevated levels” this fiscal with the top private lender putting a whopping Rs 44,000 crore more of assets on a watch-list.

“There are significant uncertainties around future trends and it is expected that NPA (non-performing assets) additions will continue to be at elevated levels in FY17,” Executive Director N S Kannan told analysts on a conference call after the quarterly results wherein it reported a 86 per cent plunge in profit to an over decadal low of Rs 406 crore.

In an investor presentation, the bank said its exposure of over Rs 44,065 crore to six segments, including power, mining, iron & steel, cement, oil rigs and “promoter entities” will be watched closely for signs of stress as the year progresses.

A bulk of these stressed loans are likely to come from this list of accounts and also the restructured book, which currently stands at Rs 8,500 crore, Kannan said during the call. A transcript of the call was placed on the bank website late this evening.

One of the major factors for the red ink on the balance-sheet in Q4 was the creation of a counter-cyclical reserve of Rs 3,600 crore which was done proactively to cover for NPAs from such assets.

The bank is working on refinance under the 5/25 scheme for Rs 750 crore of loans, while on the strategic debt restructuring side, the amount of loans under consideration beyond ones reported in the earnings is Rs 500 crore, he said.

Managing Director and Chief Executive Chanda Kochhar said the bank is confident of maintaining a healthy capital base with the core capital of over 11 per cent by March 2018, coupled with the “value in the subsidiaries” helping it meet the much needed growth capital.

“We are quite equipped to pursue growth opportunities as they come and pursue the action plans that we have laid out for resolution,” Kochhar said.

The shift to better-rated corporates and concentration on the secured retail book will further compress the net interest margin by 0.20 per cent in FY17 over 3.37 per cent in Q4, Kannan said.

It would like to keep the share of the low-cost Casa deposits at 38-40 per cent and is also targeting to grow its SME book by 15 per cent in FY17 under the overall 18 per cent domestic advances growth target, he said.

Reacting to numbers, the lowest in over 11 years, the ICICI counter tanked 4.08 per cent to Rs 226.95 on the BSE, whose benchmark Sensex shed only 0.7 per cent. This was on top of the battering the stock suffered on the day of the results on Friday, when it lost over 2 per cent.